16- to 24-year-old workers in America see massive wage growth amid hiring spree


 Inflation reached a three-decade high in October as some workers saw their wages rise, particularly younger workers.

According to the Atlanta Fed's Wage Growth Tracker, a measure of the nominal wage growth of individuals, workers in the 16-to-24 age range are seeing median wage growth accelerate much quicker than the rest of American workers, as seen below in the green line.

As of September 2021, the overall 12-month moving average of median wage growth increased by 3.6%. Those in the 25-to-54 age range saw wages grow by 3.7% while those above 55 saw wages grow by 2%. 

Workers in the 16-to-24 age range saw wage growth of 9.8% during that time period. 

Atlanta Fed
Atlanta Fed

Seeing wage growth accelerate for that particular age group makes a lot of sense because of where hiring's been strong, Greg Daco, chief U.S. economist at Oxford Economics, told Yahoo Finance.

"Most of the wage growth has been concentrated at the lower end of the wage spectrum in sectors like leisure & hospitality, retail, education where you have a preponderance of younger workers," Daco explained.

A race to fill jobs 

Much of these job openings stem from the fallout of the coronavirus pandemic, in which a record 22 million Americans lost their jobs. 

With the economy now healing and consumers resuming their spending, employers are tasked with finding the talent needed to fill these positions and are willing to pay higher wages.

An increasing number of retailers from Macy's (M) to Chipotle (CMG) have started paying their workers more, hoping to hit $15 an hour, while the federal minimum wage continues to stagnate at $7.25 an hour.

Joseph Brusuelas, the chief economist at RSM U.S., concurred with Daco that hiring is intensifying the most in food and beverage and leisure and hospitality sectors. He also noted that in his company's internal client surveys, he's seen steady support for offering higher wages just to attract workers.

West Palm Beach, CityPlace, Cheesecake Factory food runner with plates. (Photo by: Jeffrey Greenberg/Universal Images Group via Getty Images)
West Palm Beach, CityPlace, Cheesecake Factory food runner with plates. (Photo by: Jeffrey Greenberg/Universal Images Group via Getty Images)

"While roughly 70% of the missing 4.6 million workers compared to the pre-pandemic level are Baby Boomers that are exiting the workforce, firms have had to turn to the recruitment of the 16- to the 24-year-old cohort to fill the gaps caused by the churn in the domestic labor force," he said.

Growth also looks exceptionally pronounced because many of these workers — given their age — start off at a lower base.

According to Brusuelas, one of his clients in the fast-food industry had started "recruiting local high schoolers to fill basic service jobs that older workers filled prior to the pandemic." This is happening elsewhere as well: A school district in Missouri started hiring its own high school students to fill open jobs.

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